Russian polyethylene market down 13% last year

The Russian LDPE market bore the heaviest losses in 2009, having lost nearly 30% of demand and moved at 418 kt. The HDPE market shrank only by 5% (to 732.5 kt); whereas EVA consumption fell down by 9% (at about 18 kt). The LLDPE market was getting strength; that was the only market that demonstrated growth of domestic shipments up to 118 kt (+16.8%).

Overall PE imports were 21% down; the drop referred to the three PE types: HDPE was in the ⌠lead with minus 31% (about 165 kt), and followed by LDPE - 26% (about 55 kt), and EVA with minus 17% (about 10 kt). There were positive trends in imports of LLDPE (+7%) and copolymers (+20%).

The crisis in the Russian construction industry determined shrunk production volumes (tiling by 51%, pipes on average by 18%, concrete by 18.4%), which could be obviously tracked in PE imports. Imports of leading grades in the pipe extrusion sector dropped by more than two times (Yuhwa Hiden P600BL/Korea Petrochemical - by 53%, Hostalen CRP 100/LyondellBasell - by 66%).

One of the positive aspects of 2009 was the growth of output by nearly all domestic producers (overall output increased 11%, and exceeded 1 415 kt). In January 2009, Nizhnekamskneftekhim launched a PE plant that was run on average at more than 50% during the year, and the overall output exceeded 130 kt at year-end.

Domestic producers increased their exports; particularly about 278 kt of material were shipped to China. Overall exports went up by 125%, to more than 447 kt; at the same time, exports increased by all PE types apart from EVA (-4%). Exports of Tomskneftekhim's 15803-020 grade hiked by 4 times, to 170 kt.

MRC

For more detailed analysis of market moves and market development forecast, see MRC Annual Report.

March 4 (yourpetrochemicalnews) -- INEOS ChlorVinyls has today announced a price increase of ┬50 per tonne and GBP45 per tonne for methylene chloride for March supply.

This increase is in response to margin erosion over recent months that needs to be remedied.

The new price levels will be effective from March 2010, or as contracts permit.

MRCMRC Reference

Ineos is a petrochemical group.
In Russia Ineos's interests are represented by Ineos Polyolefins and IneosChlorVinyls.

The share in the Russian market in 2008:
PVC - 4.5%;

polyethylene - 1.9%
(HDPE - 2.8%, LDPE - 1.2%);
polypropylene - 1.4%
(PP-random - 22.1%, PP-impact - 2.0%);
polystyrene - 0.9%.

Imports by polymers processing technologies:
profile extrusion;
pipe extrusion;
film extrusion;
injection molding.

March 4 (plastemart) -- The shares of Reliance Industries Ltd. (RIL) have spiked past the 1000 mark as reports pour in that the bankrupt petrochemicals firm LyondellBasell rejected an acquisition bid by RIL. RIL had bid for LB in November at about US$12 bln that it raised to US$14.5 bln a week ago.

Investors were concerned that RIL was paying too much for the acquisition because of which the share prices had weakened. However, markets have been believed that the deal did not come through.

MRC

MRC Reference

LyondellBasell. The share in the Russian market in 2008:
PE - 1.4% (including HDPE - 2.5%, LDPE - 0.3%);
PP - 4.1% (including block-copolymers - 9.5%).

Annual sales growth in Russia, during the recent 5 years:
PE - 27%;
PP - 88%.

The leader in the following polymers processing technologies:

pipe extrusion;

film extrusion;

injection molding.

March 4 (plasteurope) -- In a move to step up its ⌠recycling revolution, Israel's ministry of the environment on 14 February 2010 distributed a memorandum on a draft packaging law to several ministries. Mirroring the European Directive on Packaging and Packaging Waste, the proposed law is steeped in the principle of manufacturer responsibility. Its provisions include encouraging the use of multi-use packaging, clearly marking the packaging with recycling or reuse information as well as the imposition of fines for non-compliance.

The ministry's proposed law also would oblige packaging manufacturers and importers to meet a recycling target of 60% of the total weight of single-use packaging by 2014. In addition, producers will have to comply with annual recycling targets - 22.5% in the case of plastic. Packaging producers and importers will also be required to finance new models for treating and separating waste at the source.

MRC

March 4 (plastemart) -- In a bid to meet rising demand, Thai major IRPC Pcl plans to invest US$1.4 bln in the next five years on expanding capacity. With annual capacity to produce 728,000 tons of olefins products and 367,000 tons of aromatics, IRPC is operator of Southeast Asia's biggest integrated petrochemical complex. It plans to upgrade facilities to be among the top quartile of integrated petrochemical complexes in Asia within four years.

By 2014, the company aims to boost return on invested capital (ROIC) to 22% vs last year's 9%, by focusing on diversification rather than size.
Under its five-year "Phoenix projects", IRPC will focus on maximising asset utilisation and 70% of its budget would be spent on capacity and product expansion, as its olefins capacity will rise significantly. The company plans to raise fund via bonds to refinance debt and finance expansion under the Pheonix scheme.

Petrochemicals should contribute more than 50% of profit this year and is expected to rise at least 8-10% in 2010, due to rising capacity as it had no major shutdowns this year. Its 2010 gross integrated margins, which includes both petrochemical and refinery operations, should be stable at around 2009's $9.9 a barrel given sustained demand for petrochemical products helped offset weakness in the refinery business.

IRPC expects its run rate of its 215,000 bps refinery to be around 70% this year, up from 66% last year, while its petrochemical complex would continue to run at 100%.

MRC